Enforcement

The recovery of money owing can be a slow and costly exercise. While the Act provides for the speedy resolution of disputes arising under construction contracts and clarity in relation to the right to recover monies due and owing pursuant to an adjudicator’s determination, and the process to be followed for that purpose, the basic court processes that must be relied on in the event of default and failure to pay on the part of a debtor remain slow and unchanged.

When deciding which process to use for the recovery of money owed, consideration needs to be given to a number of relevant factors including: the amount of the determination; urgency, including the likelihood of the respondent going into liquidation; whether the contract is finished or work is still being completed; and whether there is an entitlement to a charging order in respect of the construction site.

The Building Disputes Tribunal strongly encourages any party seeking to enforce an adjudicator’s determination to promptly seek independent legal advice from a lawyer experienced in the processes for enforcement and recovery of monies due under an adjudicator’s determination, before taking any steps towards recovery.
 

Enforcement of an Adjudicator's Determination - for construction contracts entered into before 1 December 2015


An adjudicator’s determination that a party to the adjudication is liable to meet a payment under the construction contract is enforceable.

If an adjudicator determines that any of the parties to an adjudication are liable to make a payment under the relevant construction contract, such payment must be made within two working days from the date of receipt of the adjudicator’s determination, unless a later date for payment is specified in the determination.

If a party fails to pay the whole or any part of the amount determined by an adjudicator  before the end of the relevant period (whether two working days or any other period specified in the determination), a claimant in an adjudication relating to a residential construction contract may proceed to enforce the determination as a debt due in any court together with the actual and reasonable costs of recovery or, if the contract is a commercial construction contract, by entry as a judgment in the District Court.

A party to a commercial construction contract seeking payment of any costs or expenses incurred in the adjudication that the adjudicator has determined is payable by another party may apply for that determination to be enforced by entry as a judgment in the District Court.

The right to enforce a determination by entry as a judgment does not apply to residential construction contracts.

If a defendant wishes to oppose an application for enforcement of the adjudicator’s determination by entry as a judgment, the respondent must, within 15 working days after the date on which the defendant is served a copy of the application, apply to the District Court for an order that entry of the adjudicator’s determination as a judgment be refused.

A determination solely relating to questions in dispute about the rights and obligations of the parties under a construction contract is not enforceable, however in any proceeding to enforce that party’s rights under the contract, the court must have regard to the adjudicator’s determination but is not bound by it.

A party who carries out construction work under a construction contract who is entitled to be paid an amount of money pursuant to an adjudicator’s determination in respect of a commercial construction contract, has a statutory right to suspend work after giving proper notice under the Act, if the party liable to pay that amount has not done so by the end of the relevant period (see ‘Suspending work’).  A party to a residential construction contract may only suspend work if the contract expressly provides the right to do so.
 

Enforcement of an Adjudicator's Determination - For construction contracts entered into or renewed from 1 December 2015


An adjudicator’s determination that a party to the adjudication is liable to meet a payment under the construction contract, or about the parties’ rights and obligations under that contract, is enforceable.

If a party fails to pay the whole or any part of the amount determined by an adjudicator before the end of the relevant period (whether two working days or any other period specified in the determination), a claimant may proceed to enforce the determination as a debt due in any court together with the actual and reasonable costs of recovery, or by entry as a judgment in the District Court.

A party seeking to enforce an adjudicator’s determination in respect of rights and obligations under the contract may apply to the District Court to have the determination enforced by entry as a judgment.

If a defendant wishes to oppose an application for enforcement of the adjudicator’s determination by entry as a judgment, the respondent must, within five working days after the date on which the defendant is served a copy of the application, apply to the District Court for an order that entry of the adjudicator’s determination as a judgment be refused.

A party who carries out construction work under a construction contract who is entitled to be paid an amount of money pursuant to an adjudicator’s determination, has the right to suspend work after giving proper notice under the Act if the party liable to pay that amount has not done so by the end of the relevant period.

An Authorised Nominating Authority
under section 65 of the Construction Contracts Act 2002